In a world where nearly everyone is always online, there is no offline. So it is not about digital business, it is just business.
Deloitte’s report about the digital influence in retail notes that in 2015 64% of all retail in-store sales were digitally influenced first. Both channels matter now (we would argue that they always did), and the boundaries between them are blurring. While retailers may be surprised by how many consumers shop digitally first, other businesses may find the reverse is true. That sometimes a phone call or a visit is necessary before initiating an online purchase. As Sabre’s Fatin Said notes, “Connected travelers do not limit themselves to either online or offline—they rather seek out benefits from both worlds.”[ii]
When it comes to the opportunity independent hotels and vacation rentals have to increase both occupancy and RevPAR in the coming year, aligning online and offline channels ranks among essential growth-supporting strategies.
Though the lion’s share of marketing energy has been behind digital for many years, for some in hospitality, the voice channel never wavered. Kyle Harris, the Marketing Manager for Park City Lodging, a vacation rental company with more than 130 properties, notes, “Seventy percent (70%) of our guests book via phone, whether that’s through our call center, travel agents, or wholesalers. Our guests pay a substantial amount to stay with us, and they want to speak with someone before they commit, even if they’re comfortable booking online.” Their strategy to ensure that online and offline channels are aligned has involved carefully tracking guests across channels, integrating their PMS with NAVIS Narrowcast for a clear picture of attribution, as well as a detailed NAVIS Reach marketing dollar assessment.
While the online to offline path is ideal because voice channel bookings have a higher conversion rate and typically earn two-thirds more revenue than online bookings, each outlet has strengths on which to capitalize. Online bookings have the lowest acquisition cost of all bookings; however, reservations agents have the highest conversion rates at 40%. NAVIS VP of Sales Michelle Marquis notes, “I am surprised when I run across a property that doesn’t include a phone number throughout their website, especially on the booking page. And it happens frequently. Independents and vacation rentals have so many more considerations than a chain hotel—we call them high-consideration stays—and often a guest will realize that a phone call, even at the last minute, will help them feel 100% confident in their decision.” Harris follows up saying, “We make a point—on our website, in our email campaigns, everywhere—to promote both online and offline options for booking, even if we think they’ll book online.” In 2018, online and offline channels must work in tandem to drive profitable direct bookings.
Further, the reservations department should be hyper-vigilant about call coverage. Answering every call as quickly as possible dramatically increases conversion opportunities, making the most of existing demand. Ensure overflow and after-hours coverage by an agent as much as possible.
Volume versus Conversions
Rather than isolating the online channel as the focus of the entire purchase process—inspiration to research to purchase—it may prove more advantageous for lodging suppliers to weight the online channel as an initial demand generator and the offline channel as the bookings generator. There is no doubt that the volume of interest created online is efficient and cost-effective, but very little of that volume is converted to business when those prospects stay online only. Ninety percent (90%) of website visitors vanish, never to be seen again, and of the 10% of visitors that give careful consideration to your property, just 1.7% will convert to a booking. A reservations agent, on the other hand, is 20 times more likely to turn a prospect to a booking.
Generating demand online is potentially very costly, because as Adweek’s Christine Birkner notes, in a survey by brand engagement firm Sullivan, none of the travel consumers who reported that they had booked online, had visited a hotel’s website directly. Birkner goes on to say, “Hotels should focus on SEO/SEM too because most hotel searches start with Google.”[iii] Driving online volume to the property website is key to either:
1). Achieving an online-direct booking or
2). Driving that prospect to your reservations agents.
Park City Lodging’s Harris says that one way they contend with third parties in the online space is to use OTAs for guest acquisition and then re-target that guest to a direct booking, either direct to the property website or the phones.
More Online Activity = More Responsibility for Reservations Agents
In an article about the changing world of car sales Harvard Business School lecturer Frank Cespedes says, “Although consumers do a lot of online research — the average U.S. car shopper now spends 11 hours online and only 3.5 hours offline, including trips to dealers — the vast majority still end up purchasing their cars in person. According to a 2015 DrivingSales study of more than 1,300 active car shoppers… the changing behavior of buyers has placed even more emphasis on selling at the dealer.”[iv]
The same goes for independent hotels and vacation rentals. The volume of time spent online in the inspiration and research phases of the booking path is high. A 2017 report by Fuel and Flip.to found that while travelers appear to be visiting fewer websites than previously thought—most report visiting four sites—when they do land on your website, they will spend nearly 30 minutes reviewing. Additionally, they found that 76% of travelers said they would call if they had a question during the booking process.[v]
As Cespedes notes, when the phone call comes, there’s more pressure to close at that moment. As Marquis adds, “Much of our emphasis in agent training now is on first call resolution. Ensuring that we don’t inadvertently send that prospective guest back into the crowded online market, where chances of losing the guest go back up. Instead, managers must empower agents to close the deal in the moment; sometimes this means giving them on-the-spot leverage to offer value-adds or special rates that won’t undercut branding.”
What Real Visibility Looks Like
Few analytics tools offer a complete picture of the online to offline pathway. Even Google is continually trying to harness this. Harvard Business Review reports that in the first quarter of 2017 most purchases happened offline and that Google is just this year claiming to have figured out the “’online ad-offline purchase’ gap” by connecting ad exposure to retail sales.[vi]
For hotels, this capability already exists in Narrowcast, which can track all online and email campaigns to phone calls. As Harris notes, Narrowcast goes a step further. “Our PMS talks to Narrowcast and NAVIS becomes the true source of what actually happened. Sure, you can track a reservation made through Google Analytics, but Analytics won’t track a cancellation, and this can make or break additional spending on a channel.” Further, he says, “Our revenue is split between owners and the company, so we have to be very clear about how much income we’re generating for the price of what we paid in advertising before we can call a campaign a success.” If an OTA campaign is resulting in a higher percentage of cancellations, occupancy and RevPAR suffer. True visibility into the online to offline path to purchase must begin at the research phase and continue through the actuality of the stay. It’s worth noting that a conversation with a reservations agent—a person-to-person connection—decreases the chances of the cancellation. Important questions have been asked and an agreement has been made between two people rather than a person and a keyboard.
On its most basic level, alignment is to draw a straight line between two things. The online to offline path to purchase is far from a straight line—it’s more of a zig-zag, sometimes a pile of spaghetti. Think of alignment here as a thread that holds both of these channels together, that keeps them connected.
The online channel may generate volume (PPC spend, web strategy), while the offline channel may be more focused on converting that volume (tracking technology, agent training). Independents and vacation rentals that undertake a more nuanced approach to these channels will be in the company of proven brands. Case in point, in 2017 Reservations.com set out to “tightly couple online and offline assisted channels so travelers who have started their booking process or have booked in the past can choose to call a customer service representative who can help them complete the process with minimal effort.”[vii]
Frank Cespedes, who you’ll recall studied the ways consumer car-buying habits are changing, says in his message to other industries, “Profitable growth is determined by how the buyer buys today and tomorrow, not yesterday, so don’t chase abstract generalizations about the Internet while ignoring the point of sale.”[viii] For independent hotels and vacation rentals, this means following the needs of today’s travelers and adjusting not just your strategy for demand generation but also for the point of sale.